This morning, the House Ways and Means Committee advanced a major tax package that includes several provisions supported by IPC. These provisions — including restoring bonus depreciation, immediate R&D expensing, and strengthening the pass-through deduction — were identified by IPC members as key tools that would help them invest, grow, and compete more effectively. While the legislation still has a long way to go before becoming law, its passage out of committee marks a critical step forward.

Here’s what’s in the bill — and what it could mean for electronics manufacturers.

✅ Key Provisions Included in the Bill:

🏗️ Restores 100% Bonus Depreciation

• Allows businesses to immediately write off the full cost of qualifying equipment and machinery investments.
• Helps manufacturers reinvest in advanced tools, automation, and production lines — a top priority identified by IPC members.

🔬 Restores Immediate Expensing for Domestic R&D

• Reverses the current amortization of R&D expenses and allows companies to fully deduct domestic research costs in the year incurred.
• Encourages continued investment in innovation — especially for small and mid-sized firms.

🧾 Expands and Makes Permanent Section 199A Pass-Through Deduction

• Increases the deduction for qualified business income to 23% and simplifies the rules for small and medium-sized businesses.
• Supports the many IPC members organized as S corporations or partnerships.

❌ What’s Not in This Version of the Bill

While the bill includes several of IPC’s top priorities, it does not include new or expanded tax credits targeted specifically at electronics manufacturing. Proposals such as:

• A 25% tax credit for sourcing U.S.-made printed circuit boards (PCBs)
• Expansion of the Section 48D and 45X credits to include PCB and electronics assembly production

…were not incorporated into this version of the bill.

Given the current focus on limiting the bill’s impact on the national debt, lawmakers prioritized restoring and extending existing tax provisions rather than creating new ones. IPC understands the constraints facing Congress and appreciates the inclusion of meaningful pro-manufacturing policies in this package.

We will continue working with policymakers to make the case for targeted incentives that address the specific gaps in the U.S. electronics manufacturing ecosystem — especially as future legislative opportunities arise.

💬 IPC CEO John Mitchell: "A Strong Step Forward"

“These provisions are proven tools that help manufacturers reinvest, innovate, and grow,” said IPC President and CEO Dr. John W. Mitchell.
“We’re encouraged by this strong step forward and urge Congress to keep up the momentum. With continued leadership in the House and action by the Senate, a tax package that supports American innovation, investment, and industrial capacity can be enacted this year.”

🛠️ What Happens Next?

• The bill now moves to the full House of Representatives for consideration.
• The Senate must also act; discussions are ongoing.
• Congressional Republicans have targeted a July 4 date for final passage.
• IPC will continue pressing lawmakers to support provisions that benefit the entire electronics manufacturing supply chain.

Want to learn more or share your perspective? Contact us at friends@ipc.org or visit Advocating for the Global Electronics Industry | IPC International, Inc.

By Richard Cappetto, IPC Senior Director, North America Government Relations   

For businesses across the electronics industry, U.S. federal tax policy is not just about accounting. Nor are tariffs solely about suppliers and logistics. These policies are much bigger, affecting our decisions about investment, innovation, hiring, and global competition. 

This is especially true in 2025, as IPC members are navigating the uncertainties associated with the U.S. Government’s sweeping moves on tax reform and tariffs.

To gather insights into the risks and opportunities our members face in this environment, the IPC Industry Intelligence Unit conducted a member survey in March and April, receiving just over 100 responses from company leaders like you. Among the highlights:  

• 2017 tax cut impacts: 54.5% said the Tax Cuts and Jobs Act of 2017 (TCJA) had had a “neutral” overall impact on their companies; 36.6% percent said it was “very positive” or “somewhat positive;” and 8.9% said “somewhat” or “very” negative.   
• Tax cut benefits: 35.6% said the TCJA has made it possible to upgrade existing equipment and machinery; to invest in new U.S.-based manufacturing facilities (17.8%); adopt advanced manufacturing technologies such as automation, robotics, and AI; and build or upgrade R&D facilities (11.9%). Significant numbers of respondents said the TCJA had made it possible to increase wages or provide bonuses to employees (34.7%); hire additional employees (30.7%); or expand training and workforce development programs (28.7%).
• 2025 tax reform outlook: If future tax reforms provided similar financial benefits, company executives said they would utilize the savings to invest in new or expanded U.S. facilities; hire additional U.S. staff or hike wages/benefits; and/or increase R&D spending.
• Tax policy priorities: Asked to rate certain tax policies on how impactful they would be in encouraging domestic manufacturing expansion, 63% favored a lower 15% corporate tax rate; 58% said restoring 100% bonus depreciation of capital expenditures; 58% called for keeping the 21% corporate income tax rate; 46% backed the restoration of full, immediate R&D expensing; and 45% urged continuation of the 199A 20% pass-through deduction.
• Tariff impacts: 40.4% said the U.S. tariff policy would have a “significant” impact on their companies, with major operational or financial adjustments required. 42.4% said they would have a “moderate “impact; 11.1% said they would have little or no impact; and 6% said it was too early to tell.
• Tariff response strategies: The top strategies for responding to the tariffs are raising prices (78.8%); seeking new suppliers (51.5%); and investing in automation (24.2%) or other efficiencies (31.3%). Only 22.6% of respondents are considering bringing production back to the United States; 77.4% said “no” or “not yet.” 

Taken together, the survey responses point to the need for a comprehensive, constructive U.S. Electronics Manufacturing Strategy, covering taxation, tariffs, workforce, and domestic investment in key electronics technologies. IPC will be rolling out that strategy in the days to come.